Pence’s proposal,
dubbed the Healthy Indiana Plan 2.0, would still rely on billions in federal
aid to cover residents earning up to 138 percent of the federal poverty
level, like states that approved the Medicaid expansion included in the
federal health care overhaul. But Pence and his supporters contend it
supports personal responsibility in a way Medicaid doesn’t because it would
rely on health savings accounts and patient input.

The plan expands on
the state’s existing Healthy Indiana Plan, which has been covering about
35,000 to 45,000 low-income residents for the past six years. Pence wrote in
a letter Tuesday to Health and Human Services Secretary Sylvia Burwell that
he wants to expand that concept.

“Because the
consumer-driven model incentivizes patients to take greater ownership over
their health care decisions, Healthy Indiana Plan members utilize health
care services in a more responsible manner than traditional Medicaid. The
program is also very popular in our state among Healthy Indiana Plan members
and non-members alike,” he wrote.

If approved, the
program would cover up to 458,000 low-income residents without health
insurance. State analysts expect the proposal to cost roughly $18 billion
through 2020, with Indiana paying $1.5 billion and the federal government
covering $16.5 billion.

The plan marks a
bit of a political balancing act for Pence. On the one hand, he has won
support from Indiana Democrats and health care advocates and sparked anger
from conservatives who say he has abandoned his principles on the issue. On
the other hand, Pence has argued that the federal health care law needs to
be repealed.

The federal
government will now begin its review of the request, including seeking
public comment. Pence filed a separate request Monday seeking to extend the
current state-run plan three more years if the expansion is not approved.